Prague/Gacko, Bosnia and Herzegovina, May 16 (CTK) - Czech power company CEZ today signed a contract with Republika Srpska in Bosnia and Herzegovina on setting up a joint venture for a project worth EUR1.4bn (Kc39bn), CEZ spokesman Ladislav Kriz told CTK.
The project includes the construction of the Gacko II coal-fired power plant, modernisation of the existing Gacko I power plant, and extension of the adjacent mine.
The new plant at Gacko, in the south-east of the country, will have a capacity of 600 to 700 MW, while the existing one has a capacity of 300 MW.
"The planned investment is yet another step in our effort to become the leader on the electricity market in central and south-eastern Europe. It will also be the biggest ever foreign investment by a Czech company, and the biggest foreign direct investment in Republika Srpska in Bosnia and Hercegovina so far," CEZ CEO and board of directors chairman Martin Roman said.
The project will be carried out by Nove Elektrarne RS (NERS), a joint venture to be set up by CEZ and Elektroprivreda RS (ERS).
CEZ will own 51 percent of NERS. ERS will invest Gacko I plant in NERS, and CEZ will raise NERS's share capital to EUR400m, said Roman.
CEZ is the biggest power producer in central Europe and the most profitable company in the Czech Republic.
It has already bought three distributors and a power plant in Bulgaria, and acquired a majority in Romanian distributor Electrica Oltenia. Last year, it bought two power plants in Poland.
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